Greek Unemployment Spikes to New Record High Above 25%

Unemployment in Greece hit a record high of 25.1 percent in July as the country's financial crisis continues to exact its heavy toll, official figures showed Thursday.

And all indications are that unemployment in Greece will be heading higher for some to come. The country is widely-predicted to enter a sixth year of a recession, that's already seen economic output slump by a quarter and youth unemployment push way above 50 percent.

"This is a very dramatic result of the recession," said Angelos Tsakanikas, head of research at Greece's IOBE economic research foundation. Tsakanikas added that he does not expect employment to pick up significantly for at least a year.

After losing access to international money markets and nearly defaulting on its mountain of debt, Greece has survived on international bailouts since May 2010.

However, solvency comes at a harsh price: To secure and continue receiving the loans, Athens imposed tough austerity measures, such as spending cuts and tax increases, in an attempt to get its public finances in order.

More austerity is due if it's not to default on its debts and potentially abandon its membership of the euro currency.

The vital rescue loan flows have been frozen until Greece's conservative-led government manages to save a further €13.5 billion ($17.4 billion) over the next two years.

Finance Minister Yiannis Stournaras will hold new talks Thursday evening with representatives of the European Union, International Monetary Fund and European Central Bank. The so-called troika has to sign off the package for the release of the funds.

Some evidence emerged Thursday that the government's strategy is working on one front, at least. Finance Ministry figures showed that the deficit-busting effort is on track despite lower-than-anticipated revenues.

The ministry said the January-September deficit was €12.64 billion, lower than the €13.5 billion target. Although revenues were €1.3 billion off target, spending was €2.2 billion less than budgeted.

Nearly three years of belt-tightening have aggravated a recession that has shaved a total 25 percent off economic output since 2008. The contraction is set to continue for at least another year.

Greece's statistical authority said 1.26 million Greeks were jobless in July, with more than 1,000 jobs lost every day over the past year. In the worst-affected 15-24 age group, unemployment was 54.2 percent.

The unemployment rate rose from 24.8 percent in June. In July 2008, a year before Greece's acute financial crisis broke, there were only about 364,000 registered unemployed.

"I'm afraid that unemployment will remain around current levels in 2013 too," said IOBE's Tsakanikas. "Even if economic recovery were to somehow arrive, the process of job creation is always much slower."